Airbnb Host Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Airbnb Host income taxable in New Mexico?

Yes, income earned as an Airbnb host is absolutely taxable, both at the federal and New Mexico state levels. The IRS considers Airbnb hosting a business activity, and New Mexico follows suit.

Federal Requirements: You’ll report your Airbnb income and expenses on Schedule C (Profit or Loss From Business), which is filed with your Form 1040. This schedule calculates your net profit (income minus expenses). Even if you only host occasionally, consistent activity generally requires you to file a Schedule C.

New Mexico Requirements: New Mexico has a graduated income tax system, meaning the tax rate increases as your income increases. Your Airbnb net profit (from Schedule C) will be added to your other income (wages, investments, etc.) to determine your total taxable income for New Mexico. This total income is then subject to the appropriate New Mexico tax bracket. You'll file Form R-1110, New Mexico Individual Income Tax Return, to report this income. New Mexico also has non-refundable credits and deductions that may further reduce your tax liability – it’s worth exploring these on the New Mexico Taxation and Revenue Department website (tax.newmexico.gov).

Top Tax Write-offs for Airbnb Hosts

Maximizing your deductions is key to minimizing your tax bill. Here are some common write-offs for New Mexico Airbnb hosts:

• Mortgage Interest & Property Taxes: If you own your property, you can deduct the portion of your mortgage interest and property taxes that relate to the time the property is used for Airbnb. This requires calculating the percentage of the year the property was rented.
• Utilities: Expenses like electricity, gas, water, and internet are deductible, again based on the percentage of time the property is rented. Keep detailed records!
• Supplies & Consumables: Items provided for guests, such as toiletries (soap, shampoo), cleaning supplies, paper towels, and linens, are deductible.
• Mileage & Vehicle Expenses: When you use your vehicle for Airbnb-related activities (guest pick-up/drop-off, grocery shopping for supplies, cleaning), you can deduct either the actual expenses (gas, oil, repairs, depreciation) or the standard mileage rate. For 2024, the standard mileage rate is approximately 67 cents per mile (verify the final official rate from the IRS – irs.gov). Keep a detailed mileage log!

The 15.3% Self-Employment Tax Surprise

Because you're considered self-employed as an Airbnb host, you're responsible for both the employer and employee portions of Social Security and Medicare taxes. This combined tax is called Self-Employment Tax and is currently 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare).

You’ll calculate this on Schedule SE (Self-Employment Tax). The good news is you only pay self-employment tax on 92.35% of your net profit from Schedule C. However, it’s a significant tax, so be prepared for it. You can deduct one-half of your self-employment tax from your gross income on Form 1040.

Closing Tip for New Mexico Residents

Navigating Airbnb taxes can be complex. I strongly recommend keeping meticulous records of all income and expenses throughout the year. Consider using accounting software designed for self-employed individuals. And, if your Airbnb business is substantial or you're unsure about any aspect of your tax obligations, consulting with a qualified tax professional (like myself!) in New Mexico is a wise investment. We can help you ensure you're taking all eligible deductions and complying with all applicable laws, maximizing your savings and minimizing your risk.